Zydus Lifesciences Limited has informed the Exchange about Investor Presentation
Code: 532321
Code: ZYDUSLIFE
November 7, 2023
Listing Department BSE LIMITED P J Towers, Dalal Street, Mumbai–400 001
Listing Department NATIONAL STOCK EXCHANGE OF INDIA LIMITED Exchange Plaza, C/1, Block G, Bandra Kurla Complex, Bandra (E), Mumbai–400 051
Re:
Investor Presentation
Dear Sir,
Please find attached the Investor Presentation on the unaudited financial results for the quarter / half year ended on September 30, 2023.
Please find the same in order.
Thanking you,
Yours faithfully, For, ZYDUS LIFESCIENCES LIMITED
DHAVAL N. SONI COMPANY SECRETARY
Encl.: As above
Zydus Lifesciences Limited Earnings Presentation: Q2 FY24
7th November, 2023
zyd us
Dedicated To Life
1
Disclaimer and Safe Harbor Statement
zyd~
Dedicated To Life
•
•
•
THIS PRESENTATION (PRESENTATION) IS NOT AN OFFER TO SELL ANY SECURITIES OR A SOLICITATION TO BUY ANY SECURITIES OF ZYDUS LIFESCIENCES LIMITED OR ITS SUBSIDIARIES OR JOINT VENTURES (TOGETHER, THE “COMPANY”). The material that follows is a Presentation of general background information about the Company’s activities as at the date of the Presentation or as otherwise indicated. It is information given in summary form and does not purport to be complete and it cannot be guaranteed that such information is true and accurate. This Presentation has been prepared by and is the sole responsibility of the Company. By accessing this Presentation, you are agreeing to be bound by the trading restrictions. It is for general information purposes only and should not be considered as a recommendation that any investor should subscribe / purchase the Company shares. This Presentation includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “anticipates”, “projects”, “expects”, “intends”, “may”, “will”, “seeks” or “should” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, aims, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Presentation and include statements regarding the Company’s intentions, beliefs or current expectations concerning, amongst other things, its results or operations, financial condition, liquidity, prospects, growth, strategies and the industry in which the Company operates.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward- looking statements are not guarantees of future performance including those relating to general business plans and strategy of the Company, its future outlook and growth prospects, and future developments in its businesses and its competitive and regulatory environment. No representation, warranty or undertaking, express or implied, is made or assurance given that such statements, views, projections or forecasts, if any, are correct or that the objectives of the Company will be achieved. There are some important factors that could cause material differences to Company’s actual results. These include (i) our ability to successfully implement our strategy (ii) our growth and expansion plans (iii) changes in regulatory norms applicable to the Company (iv) technological changes (v) investment income (vi) cash flow projections etc.
The Company, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. The information contained in this Presentation, unless otherwise specified is only current as of the date of this Presentation. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events, or otherwise. Unless otherwise stated in this Presentation, the information contained herein is based on management information and estimates. This document is just a Presentation and is not intended to be a “prospectus” or “offer document” or a “private placement offer letter” (as defined or referred to, as the case may be, under the Companies Act, 2013). It is clarified that this Presentation is not intended to be a document offering for subscription or sale of any securities or inviting offers from the Indian public (including any section thereof) or from persons residing in any other jurisdiction including the United States for the subscription to or sale of any securities including the Company’s equity shares. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. None of the Company’s securities may be offered or sold in the United States without registration under the U.S. Securities Act of 1933, as amended, except pursuant to an exemption from registration there from. This document has not been and will not be reviewed or approved by a regulatory authority in India or by any stock exchange in India. This document and its contents should not be forwarded or delivered or transmitted in any manner to any person other than its intended recipient, and should not be reproduced in any manner whatsoever.
2
Q2 FY24: At a Glance
Revenues from Operations
Rs. 43,688 mn 9% YoY
Rs. 3,225 mn 7.4% of revenues
EBITDA & Margin %
Net Profit
R&D
Highlights of Q2 FY24
❑ Total revenues grew 9% YoY, led by US, EM& EU formulations and API
businesses.
❑ Branded formulations business in India grew in high single digit after adjusting for NLEM impact, partly affected by delay in acute season.
❑ Consumer Wellness business continued to hold leadership position in 5
out of 6 brands in their respective categories.
Rs. 11,461 mn 26.2% of revenues 41%YoY
Rs. 8,007 mn 53% YoY
❑ US formulations business performed on expected lines driven by stable
base business and supported by new introductions.
Business-wise Sales Break-up (Rs. mn) and YoY Growth
❑ EM & EU formulations business continued the strong growth
momentum and delivered double digit growth.
API 3% ▲26%
Alliances 1% ▼32%
EM & EU 10% ▲17%
Total 42,586 ▲8%
US 44% ▲9%
India Form 32%
▲6%
Consumer Wellness 10% ▲3%
❑ EBITDA margin stood at 26.2%, up 580 bps YoY.
❑ Capex (organic) for the quarter: Rs. 2,162 mn.
❑ Net debt to EBITDA: (-) 0.34x (at 30-Sep’23) vs (-) 0.14x (at 31-Mar’23)
Regulatory Updates
❑ Oral Solid Dosage (OSD) facilities Unit I and II located in Ahmedabad SEZ and Biologics fill-finish facility located at Zydus Biotech Park received Establishment Inspection Reports (EIR) from the USFDA.
3
Key Financial Metrics (1/2)
Total Revenues (Rs. mn)
Gross Profit (Rs. mn) and Gross Margin %
40,055
42,571
50,106
51,396
43,688
60.2%
64.5%
66.2%
67.4%
66.3%
24,111
27,468
33,146
34,652
28,950
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Total R&D (Rs. mn) and % to Revenues
EBITDA (Rs. mn) and EBITDA Margin %
6.3%
8.1%
7.1%
6.3%
7.4%
20.4%
22.5%
25.1%
29.3%
26.2%
3,445
3,541
3,239
3,225
2,534
15,053
12,556
11,461
8,153
9,560
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
4
Key Financial Metrics (2/2)
PAT ex. Exceptional (Rs. mn)
Organic Capex (Rs. mn)
11,011
8,979
5,225
6,229
8,007
2,554
2,157
2,040
2,203
2,162
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Net Debt/ EBITDA
Net Working Capital* (Rs. mn)
0.17
0.18
53,270
56,290
57,051
63,906
55,833
Q2 FY23
Q3 FY23
Q4FY23
Q1 FY24
Q2 FY24
-0.14
(0.19)
*Net working capital includes Inventory, Trade receivables and Trade payables.
(0.34)
Q2 FY23
Q3 FY23
Q4FY23
Q1 FY24
Q2 FY24
5
India Formulations business
Branded business sustained momentum despite delayed seasonality
Highlights for the quarter
India Formulations Sales (Rs. mn)
Q2 FY24 Revenue Contribution
12,648
12,316
12,896
12,270
13,341
32%
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q2 FY24 Gr.
YoY
QoQ
5.5%
8.7%
Brand building - a key growth driver
Therapy-wise Break-up*
▪
▪
▪
Branded business grew in high single digit despite delay in acute season onset.
Growth was driven primarily by volume expansion and new launches.
Gained rank and improved market share in anti- diabetic and respiratory therapies.
On the Super Specialty front,
➢ Retained leadership position in the Nephrology
segment.
➢ In the Oncology segment, continued to grow at
the fastest pace.
Brand Value (Rs. Mn)*
1000+
500 to 1000
250 to 500
# of Brands
8
20
33
Others 15%
Anti- infectives 12%
Pain 8%
Derma 6%
GI 10%
Cardio- Diabeto 15%
Respi 14%
Gynae 7%
Onco 8%
Hepato 1%
Nephro 4%
*Source: IQVIA MAT September 23
6
Consumer Wellness
Strong brand equity to aid recovery ahead
Highlights for the quarter
Consumer Wellness Sales (Rs. mn)
7,075
6,936
Q2 FY24 Revenue Contribution
4,227
4,120
4,352
10%
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q2 FY24 Gr.
YoY
QoQ
3.0%
-37.3%
Key brands continued to hold dominant market share
▪
▪
Personal care segment, which comprises of Nycil® and EverYuth® brands, registered robust growth, driven by favorable season in many parts of the country. .
Gross margins continue to recover on account of moderating input prices and calibrated price increases taken earlier.
Brand Name
Market Share#
60.0%
35.2%
96.1%
6.1%
43.4%
78.9%
4.4%
Facial Cleansing *
Scrub
Peel Off
#Source: Nielsen and IQVIA MAT September 2023 report * Facial cleansing segment includes Face wash, Scrub and Peel-off.
7
US Formulations business
Base business performed on expected lines
Highlights for the quarter
US Formulations Sales (Rs. mn)
17,084
19,250
22,525
24,541
18,648
$ 214 mn
$ 235 mn
$ 275 mn
$ 298 mn
$ 225 mn
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q2 FY24 Gr.
YoY
QoQ
9.2%
-24.0%
Q2 FY24 Revenue Contribution
44%
Continued investment to build the generics pipeline
▪
▪
▪
QoQ decline was on account of reduction in revenues of a limited competition product, in line with the expectations.
Launched 8 new products.
New launches include Indomethacin suppository which was granted 180 days of CGT exclusivity and Plerixafor injection which was a Day 1 launch.
Filed 4 ANDAs and received 9 new product approvals.
ANDA filings and approvals - Q2 FY24
ANDA filings and approvals - H1 FY24
9
29
^
4
8
ANDA filings and approvals - Cumulative
448
Filings
Filings ^ includes 2 tentative approvals in H1 FY24 and 24 tentative approvals on a cumulative basis.
Approvals
Filings
Approvals
390
^
Approvals
8
Emerging Markets & Europe Formulations business
All key markets continued to display strong momentum
Highlights for the quarter
EM & EU Formulations Sales (Rs. mn)
Q2 FY24 Revenue Contribution
3,849
3,783
4,393
4,893
4,504
10%
▪
▪
The business continued its growth journey and posted a robust 17% growth YoY.
All the major markets delivered healthy growth during the quarter.
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q2 FY24 Gr.
YoY
QoQ
17.0%
-8.0%
9
Updates on Innovation (1/2)
NCE: ZYIL1 (NLRP3 inhibitor)
• Initiated Phase II clinical trials in patients with ALS.
• ALS is a rare, progressive and fatal neurodegenerative disease, with an average life expectancy of 3 to 5 years from the time
of symptom onset.
• Already established proof-of-concept in Phase II clinical trials in CAPS patients and published the data in Clinical
Pharmacology in Drug Development.
NCE: PCSK9 inhibitor
• Received approval from the CDSCO to initiate Phase I clinical trials to evaluate the safety and tolerability. The molecule will
be administered subcutaneously in healthy human volunteers.
• Dyslipidemia patients with high LDL cholesterol are at a high risk of ASCVD such as heart attack and stroke.
• This PCSK9 inhibitor will regulate the levels of LDL receptors, which are responsible for the uptake and clearance of
cholesterol from the blood.
ALS – Amyotrophic Lateral Sclerosis, CAPS – Cryopyrin-Associated Periodic Syndromes, ASCVD - Atherosclerotic Cardiovascular Disease, LDL – Low Density Lipoprotein
10
Updates on Innovation (2/2)
Biotech R&D
• Completed clinical trials for one mAb and completed recruitment of patients for clinical trials for another mAb.
• Received regulatory approval to initiate Phase III clinical trials for one more product.
Specialty Initiatives
• Received final approvals from the USFDA for two New Drug Applications (NDAs) viz. Sitagliptin tablets (ZITUVIOTM)and
Sitagliptin and Metformin IR tablets (ZITUVIMETTM) in the area of metabolic disorder management.
• Filed one more NDA viz. Sitagliptin and Metformin ER tablets in the area of metabolic disorder management.
mAb – Monoclonal Antibody
11
ESG Initiatives: Following a holistic philosophy of sustainability
Overview of initiatives undertaken in FY23 to turn ESG principles into actions
Environment
•
12% reduction in GHG emissions over FY22
• Renewable energy consumption up 53% over FY22
• 8% reduction in energy intensity (GJ/Mn) over FY22
• Solar power generation at mfg. sites; plans to
procure and use solar-wind hybrid power in FY24
•
Increased use of bio fuel/ hybrid fuel
• 9% reduction in water intensity (KL/ Rs. Mn) over FY22
•
18 sites: water conservation initiatives under progress
• Adoption of Zero Liquid Discharge approach to recycle
Water Management
and re-use of water
• Use of water efficient technologies
• Reduction in fresh intake of water
• 24% increase in waste disposal by Co-processing;
an eco-friendly solution
• Compliance with all applicable regulations
• Focus on reduction in waste generation
Waste Management
• Creation of an inclusive work place which promotes
gender diversity and equal opportunities for all
• Building a positive work culture, promoting skill
People Initiatives
development and a healthy work-life balance
•
Implementation of employee well-being measures
• Dedicated EHS cell at each location to oversee
implementation of EHS policy.
• Zero fatal incidents during FY23; significant
EHS Matters
reduction in reported incidents
• Reduction in Lost Time Injury Frequency Rate
(LTIFR) by 51% over FY22
• Gender diversity in Board up from 12% in FY22 to
20% in FY23; onboarded a female director
•
Independent directors in Board up from 40% in FY22
Governance
to 60% in FY23; onboarded 2 independent directors
• Zero violations of regulatory requirements in FY23
12
Zydus at a Glance
~$2.15 bn
Global Revenues1
5th
Largest generic Co. in US in terms of prescription3
7
R&D Centers For NCE, APIs, Gx formulations, Biosimilars and Vaccines
>40% Revenues from India Geography (Formulations and wellness) in FY23
Among Top 3
In ~60% of product families marketed in US4
1st
Approved product for NASH in India - (Bilypsa® - Saroglitazar)
$7.1 1st bn
Market Capitalization2
8
Brands among Top 300 in India5
1st 1st
OSD formulation for anemia associated with CKD – OxemiaTM (Desidustat)
36 Mfg. sites having
capabilities across dosage forms
Biosimilars (pipeline & launched) & 7 novel products (pipeline)
25 K
Biosimilars (pipeline & Zydans globally incl. launched) & 7 novel >1400 scientists (R&D) products (pipeline)
21
Biosimilars in portfolio Biosimilars (pipeline & (incl. 2 ADCs), launched launched) & 7 novel 13 products in India products (pipeline)
1. 2. 3.
In FY23, assuming exchange rate of Rs. 80.4 per USD As on 6th November,2023, exchange rate of Rs. 83.2 per USD IQVIA MAT September 2023 TRx
4. IQVIA MAT September 2023 TRx 5. As per IQVIA MAT September 2023
13
Consolidated Financial Performance (reported)
* Excludes Research related expenses
14
Rs. mnQ2 FY24Q2 FY23YoYgr.Q1 FY24QoQgr.H1FY24H1FY23YoYgr.Total Income from Ops.43,688 40,055 9.1%51,396 -15.0%95,084 79,698 19.3%Gross Contribution (GC)28,950 24,111 20.1%34,652 -16.5%63,602 48,661 30.7%Gross Margin %66.3%60.2%67.4%66.9%61.1%Employee benefits expenses *6,737 5,997 12.3%6,524 3.3%13,261 12,039 10.2%R&D expenses3,225 2,534 27.3%3,239 -0.4%6,464 5,376 20.2%Other operating expenses *8,349 8,719 -4.2%9,565 -12.7%17,914 17,139 4.5%Net [gain]/loss on foreign currency transactions-822 -1,292 36.4%271 -403.3%-551 -2,376 76.8%EBITDA11,461 8,153 40.6%15,053 -23.9%26,514 16,483 60.9%EBITDA Margin %26.2%20.4%29.3%27.9%20.7%Other Income540 444 21.6%360 50.0%900 1,103 -18.4%Finance cost87 351 -75.2%181 -51.9%268 694 -61.4%Depreciation and amortization1,842 1,818 1.3%1,798 2.4%3,640 3,625 0.4%PBT before exceptional items10,072 6,428 56.7%13,434 -25.0%23,506 13,267 77.2%Exceptional Expenses/ (Incomes)- - 142 -100.0%142 29 389.7%Profit before Tax10,072 6,428 56.7%13,292 -24.2%23,364 13,238 76.5%Tax expenses2,264 1,370 65.3%2,161 4.8%4,425 2,554 73.3%Share of profit from JVs234 148 58.1%215 8.8%449 369 21.7%Profit/(loss) from discontinued ops.-10 55 -118.2%-10 0.0%-20 -28 Minority Interest25 36 -30.6%467 -94.6%492 617 -20.3%Reported Net Profit8,007 5,225 53.2%10,869 -26.3%18,876 10,408 81.4% Details of Exchange Rate Fluctuations
15
Rs. mnQ2 FY24Q2 FY23YoYgr. %H1FY24H1FY23YoYgr. %A. On operating transactions (above EBITDA line)-853 -1,372 37.8%-579 -2,541 77.2%a. Included in COGS-31 -80 61%-28 -165 83.2%b. Part of other operating expenses (shown separately)-822 -1,292 -551 -2,376 B. On other income- -87 100.0%- -236 100.0%C. On foreign currency borrowings (part of finance cost)4 1 300.0%Total Exchange Rate Fluctuations ('+' = loss, '-' = gain)-853 -1,459 41.5%-575 -2,776 79.3% Thank you
For any queries, please contact Arvind Bothra Arvind.Bothra@zyduslife.com +91-22-62711905
For more information, please visit: www.zyduslife.com
www.linkedin.com/company/zyduslife
Registered Office:
Zydus Corporate Park, Scheme No. 63, Survey No. 536, Khoraj (Gandhinagar), Nr. Vaishnodevi Circle, Sarkhej-Gandhinagar Highway, Ahmedabad – 382 481 Gujarat, India